If the Interest Rate Increases, Then

question 4

Multiple Choice

If the interest rate increases, then

• A)households will decrease their level of saving.
• B)the supply of loanable funds will fall because it now costs more to borrow funds and people who were supplying the funds will realize that fewer people will be willing to borrow their funds.
• C)households will consume less and save more.
• D)government will consume more because it now costs more to borrow funds to buy goods.
• E)a, b, and d

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Definitions:

Retain Information

Retaining information involves the capacity to hold onto and recall knowledge or data over time, a fundamental aspect of learning and memory function.

System

An organized set of interrelated components that function together as a whole to achieve a specific goal.

Visual Sensation

The experience of receiving and interpreting light through the eyes, leading to the perception of objects, colors, and movements in the environment.

Sensory Registers

The initial processing systems that hold incoming information from the senses for a very brief period, allowing it to be perceived.